Facebook loses $120 billion in market cap after awful Q2 earnings

Facebook’s share price fell more than 20 percent in after-hours trading today after the company announced its slowest-ever user growth rate and a scary warning that its revenue growth would rapidly decelerate. Before today’s brutal Q2 earnings, Facebook’s share price closed today at $217.50 — a record high — but fell to around $172 after the earnings call. That’s a market cap drop of roughly $123 billion. In two hours, Facebook lost more value than most startups and even public companies are ever worth.

Recommended For You

Premium one of a kind wordpress themes that do all the onpage seo for you including image seo, with TigerPress themes you can also generate an unlimited amount of geo targeted landing pages in any language.

Give Your Subscribers the World's No.1 and Most Powerful Cloud Based Email Marketing Software to make them STOP Losing their Leads, STOP Paying Heavy Monthly Fees and Generate More Leads,
Gets them Better Delivery, More Opens and Clicks completely hassle

So why did Facebook’s share price sink like a stone? There are five big reasons:

Slowest-ever user growth rate – Facebook’s monthly user count grew just 1.54, compared to 3.14 last quarter. Daily active users grew even slower at 1.44 percent, compared to 3.42 percent last quarter. For reference, 2.18 percent was its previous slowest DAU growth rate back in Q4 2017. Suddenly hitting this wall could limit Facebook’s total user count over the long-run, and its revenue with it. Facebook tried to distract from these facts by announcing a new “family of apps audience” metric of 2.5 billion people using at least one of its apps, which will hide the shift of users from Facebook to Instagram and WhatsApp.

User count shrank in Europe, flat in U.S. & Canada – Facebook saw its first-ever decline in monthly user count in Europe, from 377 million to 376 million. It got stuck at 241 million in the U.S. and Canada after similarly pausing at 239 million in Q4 2017. Those are Facebook’s two most lucrative markets, with it earning $25.91 per user in North America and $8.76 in Europe. If those markets stall, even swift growth in the Rest of World region, where it earns just $1.91 per user, won’t save it.

Decelerating revenue growth – Facebook’s revenue grew a remarkable 42 percent year-over-year this quarter. But CFO David Wehner warned that metric would decelerate by high single-digit percentage per quarter over the coming quarters. Wehner said a combination of currency headwinds, new privacy controls and new experiences like Stories will contribute to the deceleration. This news is what caused Facebook’s share price to drop from -7 percent to -20 percent.

Recommended For You

Get all Tigerpress themes added each month, including the HTML versions and white label functionality, members also receive FREE updates and support, and also receive access to SaaS bonuses added monthly for one low price.

Leads2list email marketing course will guide hand hold you at every step of email marketing. With this training find effective leads, reach them with minimum possible expenditure, make sure they sign up happily and willingly.Create awesome Email funnels

Privacy and well-being – Q2 saw the debut of Europe’s GDPR that forced Facebook to change its privacy policies and get users to agree to how it collects data about them. Wehner blamed GDPR for Facebook loss of users in Europe. That law and Facebook’s Cambridge Analytica scandal led the company to have to improve its privacy controls. These could make it tougher for Facebook to target people with ads or show their content to more people.

Meanwhile, Facebook has continued to adopt the “Time Well Spent” philosophy, removing click-bait news and crappy viral videos that lead to passive internet content consumption that studies say is unhealthy. Instead, Facebook is pushing features like Watch Party, where users actively interact with each other. Those might not produce as much time on site and subsequent ad views, but CEO Mark Zuckerberg said the changes are “positive and we’re going to continue in this direction.”

The shift to Stories – Facebook estimates that by 2019, sharing via ephemeral vertical Stories slideshows will surpass sharing via feeds. The problem is that advertisers may be slower than users to make that shift. “Will this monetize at the same rate as News Feed? We honestly don’t know,” COO Sheryl Sandberg said. Stories ads might be full-screen and more immersive, but they don’t show off links to online stores, nor are they as well-optimized from decades of banner ad experience by the industry.

Luckily, even though Snapchat invented the Stories format, Facebook has far more people using it each day, with 150 million Stories users on Facebook, 70 million on Messenger, 400 million on Instagram and 450 million on WhatsApp. If Facebook does manage to figure out Stories ads, it could dominate, but it could take years for its advertiser count and ad prices to rise to offset the shift away from feeds.

Recommended Products

World's No.1 and Most Powerful Cloud based Email Marketing Software to make them STOP Losing their Leads, STOP Paying Heavy Monthly Fees and Generate More Leads, Gets them Better Delivery, More Opens and Clicks completely hassle free...

TigerPress Volume 6 Theme ClubGet all Tigerpress themes added each month, including the HTML versions and white label functionality, members also receive FREE updates and support, and also receive access to SaaS bonuses added monthly for one low price.

Long Tail Pro Annual Starter PlanLong Tail Pro is the fastest, most effective way to find keywords that will help your website rank in search engines.The Long Tail Pro Starter plan includes access to Long Tail Pro's entire suite of keyword research tools, including keyword lookups, re

Viral reach Reseller 120When you sign up as a reseller for Viral Reach we give you everything you need to sell it. You don’t have to bring anything except your marketing skills.Use our Sales Page, Sales Video, Everything is on our hosting. We also support your customers. If th

==========

Recommended Products

TigerPress Volume 9Premium one of a kind wordpress themes that do all the onpage seo for you including image seo, with TigerPress themes you can also generate an unlimited amount of geo targeted landing pages in any language.

RANKSNAP ProRank Page #1 of Google in a snap with this Automation tool

VidRankXpress ProA Revolutionary 1-Click Software Turns ANY Video into Endless Traffic Machine That Gets Page 1 Ranking on YouTube and Google and Drives Tons of Traffic from TOP Social Giants on 100% Autopilot.

TigerPress Volume 6 Theme ClubGet all Tigerpress themes added each month, including the HTML versions and white label functionality, members also receive FREE updates and support, and also receive access to SaaS bonuses added monthly for one low price.

LaunchShark Volume 2 OTO 1Here's What You Get When You Purchase, 10 Quick Start Marketing Page Templates and training so you can deploy your first high converting squeeze page (perfect for building your first list if you don’t have one yet)...

Instazon Pro MonthlyThe Instazon Pro upgrade supports unlimited sites. This version lets you implement WP AMZ Store and WP ProdRecommender on as many sites as you want. Add a store in any niche at any time you want and add to the profits.Moreover you get the capability to

TigerPress Volume 2Premium one of a kind wordpress themes that do all the onpage seo for you including image seo, with TigerPress themes you can also generate an unlimited amount of geo targeted landing pages in any language.

==========

Recommended Products

TigerPress Previous Volumes Second Chance 8Premium one of a kind wordpress themes that do all the onpage seo for you including image seo, with TigerPress themes you can also generate an unlimited amount of geo targeted landing pages in any language.

Bing Bang Profits OTO1 DSBing Bang Profits Software and Training to becoming an Expert CPA Affiliate Marketer through my Done For you Campaigns I have Set up inside for you to fast track your business. Bing Bang Profits is a software and training course on Bing Ads and CPA Affil

WP GDPR Fix Developer 10 SitesOnce you have the developer and agency rights to WP GDPR Fix all you have to do is tell your clients you have something that makes GDPR compliance easier.Next legally implement it on your client’s website. You can charge them a one time fee or a monthly r

VideoMate100% automated video marketing.Get automated content
Get automated traffic
Get automated list building
Get automated social followers
Get automated PROFITSAll using the power of VIDEO

TigerPress Previous Volumes Second Chance 9Premium one of a kind wordpress themes that do all the onpage seo for you including image seo, with TigerPress themes you can also generate an unlimited amount of geo targeted landing pages in any language.

WP GDPR Fix Elite Unltd SitesMake your Wordpress blog or site GDPR compliant with this powerful plugin that makes you compliant and protects you from penalties.

LaunchShark Volume 2 Downsell5 Quick Start Marketing Page Templates and training so you can deploy your first high converting squeeze page (perfect for building your first list if you don’t have one yet)...

Authority Overlay - One TimeAn amazing cloud-based service that allows you to hijack the authority of big web sites by placing your custom "calls to action" on top of any of their pages. This enables you to promote anything you want with the perceived authority of those major sites

==========

Recommended Products

TigerPress Previous Volumes Second Chance 1Premium one of a kind wordpress themes that do all the onpage seo for you including image seo, with TigerPress themes you can also generate an unlimited amount of geo targeted landing pages in any language.

TigerPress Volume 9Premium one of a kind wordpress themes that do all the onpage seo for you including image seo, with TigerPress themes you can also generate an unlimited amount of geo targeted landing pages in any language.

Viral reach Reseller 120When you sign up as a reseller for Viral Reach we give you everything you need to sell it. You don’t have to bring anything except your marketing skills.Use our Sales Page, Sales Video, Everything is on our hosting. We also support your customers. If th